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Accounting and reporting with regard to funds disbursement refers to Law No. 1 of 2004 on the State Treasury. This law is detailed in Government Regulation No. 8 of 2006 on the Financial and
Performance Reporting of Government Agencies. It is given more detail in Minister of Finance Regulation No. 171PMK.052007 on the National Government Accounting and Financial
Reporting System.
The national government accounting and inancial reporting system consists of two sub-systems, namely the State General Treasurer Accounting System SA-BUN and Government Agency
Accounting System SAI. The SA-BUN is used by the Ministry of Finance as the State General Treasurer while the SAI is used by ministriesgovernment agencies.
CHAPTER V ACCOUNTING AND REPORTING
MINISTRYBODY as THE BUDGETASSET USER
MINISTER OF FINANCE AS GENERAL TREASURER OF STATE INSTITUTE ACCOUNTING SYSTEM SAI
STATE GENERAL TREASURER ACCOUNTING SYSTEM
WORKING GROUP
BLU WORK.
GR.
Loan and Grant
Gov. Investm.
Loan Continuation
Local Transfer
Subsidy Other Exp.
Other Institute
FIN. REP. BUN FIN. REP. -KL
FIN. REP. GOV. CENTER
BUN PROVINCE
ECHELON 1
KL CONSOLI
- DATION
DJPBN DAPK
KANWIL DJPBN
KPPN PKN
- LRA - BALANCE
- CALK SP2D
- LRA - BALANCE
- CASHFLOW - CALK
- LRA - BALANCE
- CASHFLOW - CALK
Figure 12. Accounting and Reporting
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A work unit Satker is an accounting entity that is required to manage its own accounting activities and prepare inancial reports as a consolidated reporting entity. Some of the documents used
for record keeping include Payment Orders SPMs and Fund Disbursement Orders SP2Ds, among others relating to the funds disbursement process. The resulting inancial reports consist
of a Budget Realization Report LRA, a Balance Sheet, and Financial Report Notes CALK. Satkers send their reports to the Regional Level BudgetGoods User Supporting Accounting
Unit UAPPAB-W. The UAPPAB-W compiles reports from all Satkers and submits them to the Echelon 1 BudgetGoods User Supporting Accounting Unit at UAPPAB-E1, which are then
forwarded onto the BudgetGoods User Accounting Unit in the ministrygovernment agency.
The consolidation of SA-BUN and SAI reports produces a National Government Financial Report LKPP. This LKPP consists of a Budget Realization Report LRA, a Balance Sheet, a Cash
Flow Statement, and Financial Report Notes CALK. Special software is used as a recording tool from the Satker-level up the LKPP stage.
Both planned grants and direct grants are recorded in the inancial reports of ministry government agency Satkers and the national government respectively, via different means or
source documents. A planned grant uses Payment Orders SPMs from the Proxy Budget User KPA and Fund Disbursement Orders SP2Ds from the State Treasury Service Ofice KPPN,
while a direct grant uses a Validation Letter of Direct Grant SPHL for grants in cash and a Record of Direct Grant in the Form of GoodsServicesSecurities MPHL-BJS for grants in the
form of goodsservicessecurities from the KPPN.
The ministrygovernment agency as an accounting entity records any grant in the SAI that is reported in the Budget Realization Report LRA for the realization of goods expenditure
account 52, capital expenditure account 53 andor social aid expenditure account 57. The Balance Sheet also records inventory, ixed assets, and other produced assets. The Satker
records grant expenditures following completion of the reconciliation process with the KPPN. The ministrygovernment agency reconciles quarterly expenditures from direct grants in the
form of cash, goods, and services with the grants recorded as received by the Directorate General of Debt Management, Ministry of Finance DJPU.
Received grants are recorded by the Minister of Finance as the State General Treasurer BUN. The DJPU consolidates all transactions relating to grant income and expenditure national
government spending in the form of cashgoodsservicessecurities to local governments or local state-owned enterprises for each Proxy Budget User Accounting Unit - State General
Treasurer UAKPA-BUN. The inancial reports of the Supporting Accounting Unit - State General Treasurer UAP-BUN managing grants are further consolidated with those from
other UAP-BUNs by an accounting unit of the BUN that sits under the Directorate General of Treasury DJPb.
The ministrygovernment agency as an accounting and reporting entity, particularly with regard to grant-funded expenditure, reports its outgoings in an LRA. For a grant in the form of goods
the ministrygovernment agency reports expenditure in a Balance Sheet, an LRA, and a CALK,
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while for a grant in the form of services the ministrygovernment agency reports it in an LRA and a CALK.
The following accounting and reporting practices at the Bureau of Finance should be highlighted: 1. The Bureau of Finance does not record grants in the form of goodsservices but records
only cash transactions. In fact, the MMAF received grants in the form of goodsservices equivalent to IDR 16 billion in 2011, however this was only recorded in the Financial Report
Notes CALK. Detail of the sources are as follows:
a. Donor: Wageningen UR, IDR 1.3 billion - MMAF Secretariat General b. Donor: UNDP, IDR 2.8 billion - MMAF Secretariat General
c. Donor: JICA, DG of P2HP 2. The recorded amount of direct grants in cash in the LRA does not match with its detailed
breakdown. The difference in totals is IDR 823 million out of a total IDR 13 billion. The reason for this difference is that the Satker and the Bureau of Finance never reconciled
grants individually. As a result, the grant details according to the SAI entered by the Satker and the details according to the donor cannot be compared with one another. Actually, grant details
by donor can be known from grant management records from the Directorate General of Debt Management DJPU as a UAKPA-BUN.
The monitoring and evaluation of activity performance and inancial implementation is conducted by the ministrygovernment agency and reported quarterly to the Minister of Planning and
Minister of Finance. Monitoring and evaluation activities include tracking the progress of actual funds disbursement, physical achievements, goods and services procurement, problems
encountered, and the necessary monitoring and evaluation follow-up. Based on the results of this, the Minister of Planning publishes a report on the performance of activities funded by
foreign loans andor grants.
CONCLUSIONS
For both planned grants and direct grants, an accountingreporting mechanism is in place with implementation procedures that have been stipulated by The Minister of Finance. One of the
main constraints identiied is a lack of capacity amongst personnel in the Bureau of Finance and the relevant Satker with regard to accountingreporting processes, especially in connection with
newly issued regulations.
With direct grants, it was found that it was possible for managers to not report their inancial expenditure to the MMAF’s Bureau of Finance, as the related activities had never been included in
the initial budgeting process and the DIPA budget document had never been revised accordingly to account for the grant. Therefore, by end of the iscal year it was found that some direct grants,
along with their realizations, were not included in the Ministry’s end of iscal year inancial report.
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The Inspectorate General of MMAF Inspectorate General does not conduct audits speciically with regard to grants, either directly or indirectly. Nevertheless, it does review the Ministry’s
inancial reports internally prior to auditing by an external auditor the Supreme Audit Agency - BPK. This review does not assess the recording of grants or the most recent Government
Accounting System SAI. In addition to reviews of inancial and performance audit reports, the Inspectorate General also conducts other activities, namely: speciic-purpose audits, monitoring
of post-audit follow-up actions, strengthening inancial and state asset management, strengthening internal control systems, evaluating partners’ program planning activities, evaluating government
agency partners’ performance reports, monitoring and evaluating marine affairs and isheries programs, handling public complaints, providing mentoring for marine and isheries development
programs, implementing continuous control over the procurement of goodsservice, and providing technical guidance in the performance of supervisory activities.
The Inspectorate General has 217 staff with a variety of educational qualiications, including: one Ph.D.; 53 Master degrees; 109 Bachelor degrees; 14 staff with Diploma-4 qualiications; 17
staff Diploma-3 qualiications; and 23 with either high school or elementary school certiicates. Out of the total number of staff 217, 97 are auditors spread across ive inspectorates. Of this,
there are two senior auditors daltu, 21 middle-level auditors dalnis, 21 junior auditors team leaders, and 52 prospective auditorssupervisors team members.
From the information gathered on educational levels in the Inspectorate General, it has been concluded that they are adequate.
The current number of work units Satker in the MMAF is 743, with 56 at the ministry level Satker Pusat, 127 at the local government level Satker Daerah, 198 Deconcentration work
units Satker Dekonsentrasi, and 362 Assignment Task work units Satker Tugas Pembantuan. With a strategic target of 100 oversight coverage and 21 auditing teams that can be formed
from available Inspectorate General staff, each team conducts audits at more than 35 Satkers per year with auditing period of ive to seven days each. This auditing period is quite short given
the targeted coverage.
Recommendations upon the results of oversight are aimed at improving performance and control systems, with the target of 70 realized at 48 69 of the target. In addition, follow-
up actions on inancial indings exceeded its goal, with the target of 70 realized at 89 127
CHAPTER VI AUDITING
